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Reversal of Fortune

Lizzie Grubman was a girl who had everything: burgeoning career, glittering social life, powerful father. And when a girl like that gets into trouble like Lizzie's Conscience Point catastrophe, the war really begins.

The view out over the Atlantic from a Water Mill place like the one where Alex and Alexandra Von Furstenberg were holding their July 6 beach party isn't priceless, exactly, though for most people, it might as well be -- prices start at maybe $5 million. And that night, the effect was particularly stunning -- a near-full moon, framed by twin bonfires. "The moon was reflecting off the ocean in this long, brilliant stripe of light," says Paolo Zampolli, the Italian-born owner of ID Model Management, who had helicoptered out to the Hamptons for the party after a flight from Brazil, where he'd been attending São Paulo's fashion week.

The friends of "Alex and Alex" Von Furstenberg are the Hamptons' junior league -- mostly well beyond affluent but just this side of famous. For boys, the uniform was khaki-casual. For girls, it was Hamptons cute -- lots of white tops, sarongs, and strappy sandals. A moment of comedy came when two girls noticed they were wearing the same pair of $600 Cavalli jeans. For all the wealth, it was a low-key, homey event -- even a little goofy. "There was a D.J. straight out of an eighth-grade bar mitzvah, playing eighties tunes," says a guest.

Lizzie Grubman arrived at the party before 10:30 in her brand-new Mercedes SUV, along with her usual posse: Dori Cooperman, who used to work with her, and Brenda Loughery, a business partner, along with Tara Reid, the midriff-baring star of American Pie. Grubman had already had an exceedingly difficult week. Earlier, she'd learned that her mother, who's been confined to a wheelchair with multiple sclerosis, had been diagnosed with cancer, which would require surgery the following Monday. A friend who'd had dinner with her earlier in the week says she could talk of little else and looked as if she'd been crying. "Her mother is dying," says another. "She's been sick for a long time under very unpleasant circumstances, so Lizzie's already been under a great deal of stress."

For Grubman, the Von Furstenberg party was a chance to unwind. Though a major publicist is never completely off-duty, these were friends. Lobsters were served at buffet tables near the beach. Then, as the sun began to set, many of the 200 or so guests huddled around the large bonfires, where they roasted marshmallows for s'mores.

"It's frustrating to sit back while people make falseaccusations and spread rumors and draw awful cartoons."

Midway through the party, Grubman came into the kitchen for a plate of pasta. Zampolli said hello to her inside. "She was normal," he says, "nothing out of the ordinary." Some reports say she was drinking. Says a guest: "She was having a good time like everyone else."

A little after midnight, cops started ticketing cars outside, so the party broke up. Grubman was heading over to Conscience Point, one of her signature Hamptons accounts, to end the evening. Instead -- in a crash that broke ankles and pelvises and spilled cocktails and launched upwards of $100 million in lawsuits -- she may have ended a whole Hamptons era.

"I'm used to being in control in my business," says Lizzie Grubman, hunkered down in her Lafayette Street office, in her first interview since the incident. "It's so frustrating to sit back every day while people make these false accusations and spread rumors and draw awful cartoons and not be able to say anything because my lawyers have instructed me not to."

The Grubmans, as much as anyone, are responsible for the modern Hamptons, in all their obsession with wealth and celebrity and their thrilling, stupefying social excess. Lizzie's father, Allen Grubman, is a singularity in the music business, the industry's sole superpower attorney. And that clout has made him one of the East End's prime celebrity nexuses.

Grubman is a man of almost cartoonish crudeness -- an effect he amplifies with a comic edge. He revels in his working-class Crown Heights roots, in the fact that he came from so little and has acquired so much. The Grubman family crest, he likes to say, should be an S with two lines drawn through it. He'll happily calculate for casual luncheon guests the burn rate of his Lily Pond Lane mansion: about $40,000 per weekend.

"The first time I met him at a tailor's," says an acquaintance, "he started shouting, 'You don't make enough money to be here.' A few minutes later, he takes out an American Express black card, which is moguls-only. You have to spend like $150,000 a year to get one. 'See this?' he says. 'It's the closest you'll ever come to one of these.' But he's just playing with you."

Grubman, 57, attended Brooklyn Law School, bootstrapping his way to the absolute pinnacle of his profession and a three-floor office in Carnegie Hill Towers. As a music-business lawyer, Grubman has often played both sides of the fence, representing a Sony artist like Springsteen while simultaneously representing Sony, and, miraculously, both sides will come out happy (except Billy Joel, who had a nasty legal dispute with Grubman over just such an issue). In the music business, it's a sign of weakness to have someone other than Grubman as your lawyer. And his music-business power has tended to help pull clients like Puffy Combs out to the Hamptons.

The Fourth of July weekend has always been a big one for the Grubman family. It was on Independence Day that Allen Grubman always threw his primary summer party at the Grubmans' Peter Cook-designed contemporary house just steps from the beach on Lily Pond Lane. It started out rather small but achingly exclusive. A crowd of maybe twenty Grubman intimates -- people like Tommy Mottola, Martha Stewart, Ian Schrager, Calvin Klein, Jon Tisch -- would mingle on the screened-in back porch over a catered lunch of lobster salad and grilled swordfish. The house, as usual, was immaculate, as was the rose garden out near the ocean -- Allen's second wife, Debbie Grubman, a blonde, voluptuous Manhattan real-estate broker -- supervised them assiduously.

Lizzie Grubman grew up having the likes of Springsteen and Madonna over for lunch, so fame was never a big deal to her. She radiated that sort of casualness to her clients and at her events. She was her father's daughter, in other words -- loose, brash, forceful, unintimidatable. On the social circuit, she's not known as someone who parties every night, but she's certainly not a teetotaler -- business and pleasure are inextricably mixed. Lizzie's sister, Jenny, is the analytic side of Allen, a hard-charging young attorney who works in her father's firm.

The sorts of skills Lizzie possesses, however, are not ones that produce prep-school success -- quite the opposite. She was asked to leave three city prep schools: Horace Mann, Lenox, and Dwight. "There's always that one tough kid who's the ringleader. They'll boss everyone around," recalls one Horace Mann mother. "That was Lizzie."

In eighth grade, Lizzie was asked not to return to the school. At Dwight, she was known for her liberal use of her father's credit cards and her expertise about which East Side bars permitted underage drinking. Lizzie attended Northeastern University for two years but didn't graduate.